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« February 2, 2003 - February 8, 2003 | Main | February 16, 2003 - February 22, 2003 »

February 14, 2003

Speedpass expands to Stop & Shop

Speedpass Network has announced that three Boston area Stop & Shop supermarkets are now accepting Speedpass.
Stop & Shop is the first supermarket chain to accept Speedpass and its new features. These features allow customers to 1) link to the store's membership card, 2) link to a personal checking account, 3) instantly enroll for a free Speedpass device onsite, and 4) manage their Speedpass account online. These new enhancements help get customers in and out fast and provide a new level of convenience for Stop & Shop customers.

Financial Times: MasterCard warned over transaction fees

Bob Sherwood and Jane Croft report on the UK's Office of Fair Trading's decision regarding MasterCard's interchange fees.
The watchdog was annoyed about the fee - 1.1 per cent of any transaction - paid by the retailers' banks to the card-issuing banks. The OFT said this cost was passed on to retailers and, in turn, to consumers. That drove up prices at stores where cards were used. There are about £30bn worth of transactions carried out using MasterCard credit or charge cards each year, so shoppers are coughing up about £330m a year for the interchange fee alone. The OFT said MasterCard had failed to justify the level of its fee. It said the system breached competition rules because it was so widely used and there were no incentives for banks to agree a lower fee.
The full text of the OFT's decision is available online.

Business Week: The Bank of 7-Eleven?

Last week, Business Week did a Q&A with 7-Eleven's CEO Jim Keyes about his financial services strategy.
Take 7-Eleven's prepaid Vcom cards. Developed by retail-transaction-services concern Alliance Data Systems (ADS ), Vcom cards will let customers make ATM transactions as well as buy money orders, transfer funds, cash checks, and eventually pay bills. By the end of May, 7-Eleven will outfit 1,000 of its 5,800 U.S. stores with Vcom machines. Now that the U.S. has myriad all-night shopping options, Dallas-based 7-Eleven, which reported net income of $41 million on $10.1 billion in revenues in 2002, is betting big on the service. (Some 73% of 7-Eleven's common stock is owned by IYG Holding, which comprises Ito-Yokado Co. and Seven-Eleven Japan Co.)

February 13, 2003

Providian hosts Investor Conference

Providian hosted an Investor Conference today. Slides and an audio replay are available.

Smart Card Alliance: Smart cards can protect privacy

The Smart Card Alliance has released a new white paper, Privacy and Secure Identification Systems: The Role of Smart Cards as a Privacy-Enabling Technology.
"Smart cards provide a powerful tool for protecting an individual's privacy," said Robert Donelson, senior property manager of the Bureau of Land Management at the Department of Interior (DOI). "For those who have access to private information, smart cards ensure only legitimate users can access information, and they can only access the information they need to do a specific task. Other information that may be in the system can be kept confidential. Of course, privacy must be protected throughout the system, not just at the card level."

Concord EFS adjusts management structure

Concord EFS announced this morning that Dan Palmer and Bond Isaacson will be co-CEO's going forward. In addition, Richard Kiphart is replacing Palmer as Chairman of the Board. Ed Labry remains president.

February 11, 2003

Credit Card Management: Fast food meets fast payment

Linda Punch and Jeffrey Green report on quick service restaurants and their increasing acceptance of card payments.
Perhaps the most important obstacle overcome by the card industry was the time it takes to process a card transaction. „First and foremost, the through-put of the transaction was probably the biggest concern that merchants had in the QSR segment,‰ Gore says. „Obviously, that‚s critical to their livelihood. They can‚t afford any type of delay whatsoever in terms of getting that transaction through, expedited and get the next customer up in line.‰ To that end, fast-food restaurants are beginning to adopt the point-of-sale technology originally developed to speed processing of transactions for supermarkets and gas stations‚ pay-at-the-pump programs.

February 10, 2003

New York Times: More on Visa, MasterCard fees

Jennifer Bayot reports in Tuesday's New York Times on the tentative ruling by a California judge regarding currency conversion fees.
Visa said in a statement that it was disappointed with the preliminary ruling in the case, Adam A. Schwartz v. Visa International, Visa International Service Association, Visa U.S.A. and MasterCard International. "The court decision flies in the face of common sense," said Stephen C. Theoharis, senior vice president of Visa U.S.A. "Visa pioneered today's currency conversion system that protects consumers from exorbitant rates when traveling abroad. The decision is fundamentally flawed, has no basis in fact or law, and we will appeal."

BBC: Visa EU's online sales soar

Visa EU reports that online sales in the fourth quarter of 2002 grew at a rate of 136% over the prior year.

WSJ: Visa, MasterCard may face over $500 million in refunds

Paul Beckett and Ron Lieber report in this morning's Wall St. Journal that Visa and MasterCard could face a bill of at least $500 million for poorly disclosing fees to cardholders using their cards overseas.
Judge Sabraw of California Superior Court in Oakland, in his tentative opinion, didn't ban the charging of currency-conversion fees, which generate hundreds of millions of dollars of revenue each year for Visa, MasterCard and the card-issuing banks, people familiar with the matter said. But the judge did say that because of what he believed was inadequate disclosure to cardholders, Visa and MasterCard would have to refund many cardholders who have paid the 1% surcharge since 1996, these people said. The judge also ruled that Visa and MasterCard would have to mandate that banks that issue their cards disclose the fee clearly in statements in the future.

February 09, 2003

Washington Post: The Check's Last Writes

Jackie Spinner reports on the growth in electronic payments.
Checks still account for nearly 60 percent of all retail non-cash payments, according to Federal Reserve data. By comparison, electronic payments made up 7.9 percent of the pie in 2000. The Fed, which actually does not process the majority of checks written, now believes that check writing has peaked, for real. In an August 2002 report, the Fed said it appears that the number of checks written began to decline sometime in the mid-1990s after a high of 49.5 billion in 1995. A key point: Electronic payments are growing, at a rate of 18 percent from 1979 to 2000, compared with a growth rate of 1.2 percent for checks in the same period.

Kansas City Federal Reserve Bank: Nonbanks in the payment system

An excellent overview (by Terri Bradford, Matt Davies, and Stuart E. Weiner of the Federal Reserve Bank of Kansas City) of the US payment system and the many roles that nonbanks play in the system. PDF format.
Nonbanks have always been a key component of the nation‚s payments system. In recent years, however, nonbanks have become even more prominent. This heightened visibility raises several questions. What payments activities are nonbanks engaged in? What roles do nonbanks play in specific payments types? What types of risk are potentially associated with nonbank participation? This paper begins to address these questions. Preliminary findings include: (1) Nonbanks are involved in a myriad of activities and roles, both in traditional and emerging payments types; (2) Nonbank business relationships with banks and other participants in the payments systems are often highly complex and interrelated; (3) Nonbanks are rarely directly involved in settlement activities and, hence, appear to be associated with limited settlement and systemic risk; (4) Both nonbanks and banks appear to be increasingly susceptible to operational risk factors.

CNN: Cashless society gets mixed reviews

CNN carries an AP wire story about Moneo, the new French electronic purse chip cards. A friend, just back from Paris, notes that many Parisians don't like all of the change introduced by the conversion to the Euro. It's some of those subtle consumer convenience advantages that may just result in success. But some don't agree:
"We all know that the future of money is completely virtual," said Torris, the Forrester analyst. "Moneo is a first step toward that." Try telling that to Christine Berube. She is refusing to offer the service at her tobacco counter in a dimly lit bar that serves up endless glasses of cheap table wine and cups of coffee to mostly elderly regulars. "I think it's useless," the 46-year-old tobacconist said to nods of agreements from clients who draw heavily on their cigarettes. "I know how to count change quickly and don't want to enrich the banks."

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